GeographyArea: 2.5 million sq. km. (967,500 sq. mi.); almost the size of continental U.S.Cities: Capital--Khartoum. Other cities--Port Sudan, Kassala, Kosti, Juba (capital of southern region). No current accurate population statistics available.Terrain: Generally flat with mountains in east and west. Khartoum is situated at the confluence of the Blue and White Nile Rivers. The southern regions are inundated during the annual floods of the Nile River system (the Suud or swamps).Climate: Desert and savanna in the north and central regions and tropical in the south.

GovernmentType: Military dictatorship with pro-government parliament.Independence: January 1, 1956.Constitution: 1998 (passed by presidential decree but suspended in December 1999 when National Security Emergency law was promulgated by presidential decree.)Branches: Executive--executive authority held by the president who also is the prime minister, head of state, head of government, and commander in chief of the armed forces. Judicial--High Court, Minister of Justice, Attorney General, civil and special tribunals (where Islamic principles inspire the constitution as well as civil and criminal law and jurisprudence), constitutional court, tribal courts, and investigative commissions. Legislative--National Assembly. Elections in December 2000 were seriously flawed as the major parties boycotted the election; the majority of ruling party candidates ran unopposed; and most remaining members of parliament, especially from the south, were appointed by the President.Administrative subdivisions: Twenty-six states, each with a governor appointed by the president, along with a local cabinet and regional ministers (so-called Federal Rule system).Political parties: All political parties were banned following the June 30, 1989 military coup. Political associations, which take the place of parties, were authorized in 2000. Some parties are in self-imposed exile.Central government budget (2004 est.) $7.6 billion. Defense (2004 est.) 40% of GNP.

PEOPLEIn Sudan's 1993 census, the population was calculated at 26 million. No comprehensive census has been carried out since that time due to the continuation of the civil war. Current estimates range to 32 million. The population of metropolitan Khartoum (including Khartoum, Omdurman, and Khartoum North) is growing rapidly and ranges from 6-7 million, including around 2 million displaced persons from the southern war zone as well as western and eastern drought-affected areas.

Sudan has two distinct major cultures--Arab and black African--with hundreds of ethnic and tribal divisions and language groups, which makes effective collaboration among them a major problem.

The northern states cover most of the Sudan and include most of the urban centers. Most of the 22 million Sudanese who live in this region are Arabic-speaking Muslims, though the majority also use a traditional non-Arabic mother tongue--e.g., Nubian, Beja, Fur, Nuban, Ingessana, etc. Among these are several distinct tribal groups: the Kababish of northern Kordofan, a camel-raising people; the Ja'alin and Shaigiyya groups of settled tribes along the rivers; the seminomadic Baggara of Kordofan and Darfur; the Hamitic Beja in the Red Sea area and Nubians of the northern Nile areas, some of whom have been resettled on the Atbara River; and the Negroid Nuba of southern Kordofan and Fur in the western reaches of the country.

The southern region has a population of around 6 million and a predominantly rural, subsistence economy. This region has been negatively affected by war for all but 10 years since independence in 1956, resulting in serious neglect, lack of infrastructure development, and major destruction and displacement. More than 2 million people have died, and more than 4 million are internally displaced or have become refugees as a result of the civil war and war-related impacts. Here the Sudanese practice mainly indigenous traditional beliefs, although Christian missionaries have converted some. The south also contains many tribal groups and many more languages are used than in the north. The Dinka--whose population is estimated at more than 1 million--is the largest of the many black African tribes of the Sudan. Along with the Shilluk and the Nuer, they are among the Nilotic tribes. The Azande, Bor, and Jo Luo are "Sudanic" tribes in the west, and the Acholi and Lotuhu live in the extreme south, extending into Uganda.

HISTORYSudan was a collection of small, independent kingdoms and principalities from the beginning of the Christian era until 1820-21, when Egypt conquered and unified the northern portion of the country. Historically, the pestilential swamps of the Suud discouraged expansion into the deeper south of the country. Although Egypt claimed all of the present Sudan during most of the 19th century, it was unable to establish effective control over southern Sudan, which remained an area of fragmented tribes subject to frequent attacks by slave raiders.

In 1881, a religious leader named Muhammad ibn Abdalla proclaimed himself the Mahdi, or the "expected one," and began a religious crusade to unify the tribes in western and central Sudan. His followers took on the name "Ansars" (the followers), which they continue to use today; they are associated with the single largest political grouping, the Umma Party, led by the descendant of the Mahdi, Sadiq al-Mahdi. Taking advantage of conditions resulting from Ottoman-Egyptian exploitation and maladministration, the Mahdi led a nationalist revolt culminating in the fall of Khartoum in 1885. The Mahdi died shortly thereafter, but his state survived until overwhelmed by an Ango-Egyptian force under Lord Kitchener in 1898. Sudan was proclaimed a condominium in 1899 under British-Egyptian administration. While maintaining the appearance of joint administration, the British Empire formulated policies and supplied most of the top administrators.

IndependenceIn February 1953, the United Kingdom and Egypt concluded an agreement providing for Sudanese self-government and self-determination. The transitional period toward independence began with the inauguration of the first parliament in 1954. With the consent of the British and Egyptian Governments, Sudan achieved independence on January 1, 1956, under a provisional constitution. The United States was among the first foreign powers to recognize the new state. However, the Arab-led Khartoum government reneged on promises to southerners to create a federal system, which led to a mutiny by southern army officers that sparked 17 years of civil war (1955-72).

The National Unionist Party (NUP), under Prime Minister Ismail al-Azhari, dominated the first cabinet, which was soon replaced by a coalition of conservative political forces. In 1958, following a period of economic difficulties and political maneuvering that paralyzed public administration, Chief of Staff Lt. Gen. Ibrahim Abboud overthrew the parliamentary regime in a bloodless coup.

Gen. Abboud did not carry out his promises to return Sudan to civilian government, however, and popular resentment against army rule led to a wave of riots and strikes in late October 1964 that forced the military to relinquish power.

The Abboud regime was followed by a provisional government until parliamentary elections in April 1965 led to a coalition government of the Umma and National Unionist Parties under Prime Minister Muhammad Ahmad Mahjoub. Between 1966 and 1969, Sudan had a series of governments that proved unable either to agree on a permanent constitution or to cope with problems of factionalism, economic stagnation, and ethnic dissidence. The succession of early post-independence governments were dominated by Arab Muslims who viewed Sudan as a Muslim Arab state. Indeed, the Umma/NUP-proposed 1968 constitution was arguably Sudan's first Islamic-oriented constitution.

Dissatisfaction culminated in a second military coup on May 25, 1969. The coup leader, Col. Gaafar Muhammad Nimeiri, became Prime Minister, and the new regime abolished parliament and outlawed all political parties.

Disputes between Marxist and non-Marxist elements within the ruling military coalition resulted in a briefly successful coup in July 1971, led by the Sudanese Communist Party. Several days later, anti-communist military elements restored Nimeiri to power.

In 1972, the Addis Ababa agreement led to a cessation of the north-south civil war and a degree of self-rule. This led to a period of 10 years of hiatus in the civil war.

In 1976, the Ansars mounted a bloody but unsuccessful coup attempt. In July 1977, President Nimeiri met with Ansar leader Sadiq al-Mahdi, opening the way for reconciliation. Hundreds of political prisoners were released, and in August 1977 a general amnesty was announced for all opponents of Nimeiri's government.

In September 1983, as part of an Islamicization campaign, President Nimeiri announced his decision to incorporate traditional Islamic punishments drawn from Shari'a (Islamic law) into the penal code. This was controversial even among Muslim groups. After questioning Nimeiri's credentials to Islamicize Sudan's society, Ansar leader Sadiq al-Mahdi was placed under house arrest. President Nimeiri declared a state of emergency, in part to ensure that Shari'a was applied more broadly. Most constitutionally guaranteed rights were suspended. In the north, emergency courts, later known as "decisive justice courts," were established, with summary jurisdiction over criminal cases. Amputations for theft and public lashings for alcohol possession were common during the state of emergency. Southerners and other non-Muslims living in the north were also subjected to these punishments. These events, and other longstanding grievances, in part led to a resumption of the civil war that had been in abeyance since 1972, and the war continues today.

In September 1984, President Nimeiri announced the end of the state of emergency and dismantled the emergency courts but soon promulgated a new judiciary act, which continued many of the practices of the emergency courts. Despite Nimeiri's public assurances that the rights of non-Muslims would be respected, southerners and other non-Muslims remained deeply suspicious.

Early 1985 saw serious shortages of fuel and bread in Khartoum, a growing insurgency in the south, drought and famine, and an increasingly difficult refugee burden. In early April, during Nimeiri's absence from the country, massive demonstrations, first triggered by price increases on bread and other staples, broke out in Khartoum.

On April 6, 1985 senior military officers led by Gen. Suwar al-Dahab mounted a coup. Among the first acts of the new government was to suspend the 1983 constitution and disband Nimeiri's Sudan Socialist Union. A 15-member transitional military council was named, chaired by Gen. Suwar al-Dahab. In consultation with an informal conference of political parties, unions, and professional organizations known as the "Gathering," the council appointed an interim civilian cabinet, headed by Prime Minister Dr. Al Gizouli Defalla.

Elections were held in April 1986, and the transitional military council turned over power to a civilian government as promised. The government, headed by Prime Minister Sadiq al-Mahdi of the Umma Party, consisted of a coalition of the Umma, DUP (formerly NUP), the National Islamic Front (Hassan al-Turabi's NIF) and several southern parties. This coalition dissolved and reformed several times over the next few years, with Sadiq al-Mahdi and his Umma party always in a central role.

During this period, the civil war intensified in lethality and the economy continued to deteriorate. When prices of basic goods were increased in 1988, riots ensued, and the price increases were canceled. The civil war was particularly divisive (see "Civil Strife" below). When Sadiq al-Mahdi refused to approve a peace plan reached by the DUP and the Sudan People's Liberation Army (SPLA) in November 1988, the DUP left the government. The new government consisted essentially of the Umma and the Islamic fundamentalist NIF.

In February 1989, the army presented Sadiq with an ultimatum: he could move toward peace or be thrown out. He formed a new government with the DUP and approved the SPLA/DUP agreement. On June 30, 1989, however, military officers under then-Col. Omar Hassan al-Bashir, with NIF instigation and support, replaced the government with the Revolutionary Command Council for National Salvation (RCC), a junta comprised of 15 (reduced to 12 in 1991) military officers assisted by a civilian cabinet. General al-Bashir became President and chief of state, Prime Minister and chief of the armed forces. He continues to hold executive authority over the Khartoum government.

In March 1991, a new penal code, the Criminal Act of 1991, instituted harsh punishments nationwide, including amputations and stoning. Although the southern states are "officially" exempt from these Islamic prohibitions and penalties, the 1991 act provides for a possible future application of Islamic law (Shari'a) in the south. In 1993, the government transferred all non-Muslim judges from the south to the north, replacing them with Muslim judges. The introduction of Public Order Police to enforce Shari'a law resulted in the arrest and treatment under Shari'a law of southerners and other non-Muslims living in the north.

Civil StrifeIn 1955, southern resentment of northern Muslim Arab domination culminated in a mutiny among southern troops in Equatoria Province. For the next 17 years, the southern region experienced civil strife, and various southern leaders agitated for regional autonomy or outright secession.

This chronic state of insurgency against the central government was suspended in 1972 after the signing of the Addis Ababa Accords granting southern Sudan wide regional autonomy on internal matters. But a 1983 decree by President Nimeiri that declared his intention to transform Sudan into a Muslim Arab state, and divided the south into three regions and instituted Shari'a law, revived southern opposition and militant insurgency.

After the 1985 coup, the new government rescinded this decree and made other significant overtures aimed at reconciling north and south but did not rescind the so-called September Laws of the Nimeiri regime instituting Shari'a law. In May 1986, the Sadiq al-Mahdi government began peace negotiations with the SPLA, led by Col. John Garang de Mabior. In that year the SPLA and a number of Sudanese political parties met in Ethiopia and agreed to the "Koka Dam" declaration, which called for abolishing Islamic law and convening a constitutional conference. In 1988, the SPLA and the DUP agreed on a peace plan calling for the abolition of military pacts with Egypt and Libya, freezing of Islamic law, an end to the state of emergency, and a cease-fire. A constitutional conference would then be convened.

Following an ultimatum from the armed forces in February 1989, the Sadiq al-Mahdi government approved this peace plan and engaged in several rounds of talks with the SPLA. A constitutional conference was tentatively planned for September 1989. The military government, which took over on June 30, 1989, however, repudiated the DUP/SPLA agreement and stated it wished to negotiate with the SPLA without preconditions. Negotiating sessions in August and December 1989 brought little progress. The SPLA controlled large areas of Equatoria, Bahr al Ghazal, and Upper Nile provinces and also operated in the southern portions of Darfur, Kordofan, and Blue Nile provinces. The government controlled a number of the major southern towns and cities, including Juba, Wau, and Malakal. An informal cease-fire in May broke down in October 1989, and fighting has continued since then.

In August 1991, internal dissension among the rebels led opponents of Colonel Garang's leadership of the SPLA to form the so-called Nasir faction of the rebel army. In September 1992, William Nyuon Bany formed a second rebel faction, and in February 1993, Kerubino Kwanyin Bol formed a third rebel faction. On April 5, 1993, the three dissident rebel factions announced a coalition of their groups called SPLA United at a press conference in Nairobi, Kenya. The factions clashed occasionally, and the rebels lost much of their credibility with the West.

In 1993, the leaders of Eritrea, Ethiopia, Uganda, and Kenya formed the Intergovernmental Authority on Development (IGAD) to pursue a peace initiative for the Sudan. The IGAD initiative promulgated the 1994 Declaration of Principles (DOP) that aimed to identify the essential elements necessary to a just and comprehensive peace settlement--the relationship between religion and the state, powersharing, wealthsharing, and the right of self-determination for the south. The Sudanese Government did not sign the DOP until 1997 after major battlefield losses to the SPLA.

In 1995, a coalition of internal and exiled opposition parties in the north and the south created the National Democratic Alliance (NDA) as an anti-government umbrella group. This development opened a northeastern front to the civil war, making it more than before a center-periphery rather than simply a north-south conflict. The SPLA, DUP, and Umma Parties were the key groups forming the NDA, along with several smaller parties and northern ethnic groups.

In 1997, the government signed a series of agreements with rebel factions, led by former Garang lieutenant Riek Machar, under the banner of "Peace from Within." These included the Khartoum, Nuba Mountains, and Fashoda agreements that ended military conflict between the government and significant rebel factions. Many of those leaders then moved to Khartoum where they assumed marginal roles in the central government, or collaborated with the government in military engagements against the SPLA. These three agreements paralleled the terms and conditions of the IGAD agreement, calling for a degree of autonomy for the south and the right of self-determination.

In July 2000, the Libyan/Egyptian Joint Initiative on the Sudan was mooted, calling for the establishment of an interim government, powersharing, constitutional reform, and new elections. Southern critics objected to the joint initiative because it neglected to address issues of the relationship between religion and the state and failed to mention the right of self-determination. It is unclear to what extent this initiative will have a significant impact on the search for peace, as some critics view it as more aimed at a resolution among northern political parties and protecting the perceived security interests of Egypt in favor of the unity of the Sudan.

In September 2001, former Senator John Danforth was designated Presidential Envoy for Peace in the Sudan. His role aimed to explore the prospects that the U.S. could play a useful catalytic role in the search for a just end to the civil war, and enhance humanitarian services delivery that could help reduce the suffering of the Sudanese people stemming from war-related effects.

In July 2002, the Government of Sudan and the Sudan People's Liberation Movement/Army reached a historic agreement on the role of state and religion and the right of southern Sudan to self-determination. This agreement, known as the Machakos Protocol and named after the town in Kenya where the peace talks were held, concluded the first round of talks sponsored by the Intergovernmental Authority on Development. The effort was mediated by Kenyan General Lazaro Sumbeiywo. Peace talks resumed and continued during 2003, with discussions regarding wealth sharing and three contested areas.

A rebellion broke out in Darfur, in western Sudan, in 2003, led by two rebel groups--the Sudan Liberation Movement/Army (SLM/A) and the Justice and Equality Movement (JEM). In seeking to defeat the rebel movements, the Government of Sudan armed and supported local tribal and other militias, which have come to be known as the "Jingaweit." Attacks on the civilian population by the Jingaweit, often with the direct support of Government of Sudan forces, have led to the death of tens of thousands of persons in Darfur. Some two million persons have been internally displaced in Darfur; an additional 213,000 have sought refuge from the conflict in neighboring Chad.

On September 9, 2004, Secretary of State Colin L. Powell told the Senate Foreign Relations Committee that "genocide has been committed in Darfur and that the Government of Sudan and the Jingaweit bear responsibility-and that genocide may still be occurring."

A cease-fire between the parties was signed in N'djamena, Chad, on April 8, 2004; despite the deployment of an African Union observer force to monitor implementation of the cease-fire and investigate violations, violence has continued. The SLA/M and JEM have continued negotiations with the Government of Sudan under mediation of the African Union. These talks resulted in additional protocols on addressing the humanitarian and security aspects of the conflict on November 9, 2004. Like previous agreements, these have been violated by both sides. The African Union, with the support of the United Nations Security Council, the United States, and the rest of the international community, began deploying a larger monitoring and observer force in October 2004. The mandate of this force, which will eventually have more than 3,300 personnel, includes some aspects of protection of the civilian population.

The United Nations Security Council had passed three resolutions (1556, 1564, and 1574), all intended to move the Government of Sudan to rein in the Jingaweit, protect the civilian population and humanitarian participants, seek avenues toward a political settlement to the humanitarian and political crisis, and recognize the need for the rapid deployment of an expanded African Union mission in Darfur. The United States has been a leader in pressing for strong international action by the United Nations and its agencies. In February 2005, the U.S. circulated a draft resolution in the UN Security Council that would establish a UN peace support operation in the Sudan and includes measures to pressure the parties to the Darfur conflict to abide by their commitments in previous resolutions, including targeted sanctions.

On November 19, 2004, the Government of Sudan and the Sudan People's Liberation Movement/Army signed a declaration committing themselves to conclude a final comprehensive peace agreement by December 31, 2004, in the context of a special session of the United Nations Security Council in Nairobi, Kenya-only the fourth time the Council has met outside of New York since its founding. At this session, the UNSC unanimously adopted Resolution 1574, which welcomed the commitment of the government and the SPLM/A to achieve agreement by the end of 2004, and underscored the international community's intention to assist the Sudanese people and support implementation of the comprehensive peace agreement. It also demanded that the Government of Sudan and the SLA/M and JEM halt all violence in Darfur.

In keeping with their commitment to the Security Council, the Government of Sudan and the Sudan People's Liberation Movement/Army initialed the final elements of the comprehensive agreement on December 31, 2004. The two parties formally signed the Comprehensive Peace Agreement (CPA) on January 9, 2005. The United States and the international community have welcomed this decisive step forward for peace in Sudan.

The civil war had displaced more than 4 million southerners. Some fled into southern cities, such as Juba; others trekked as far north as Khartoum and even into Ethiopia, Kenya, Uganda, Egypt, and other neighboring countries. These people were unable to grow food or earn money to feed themselves, and malnutrition and starvation became widespread. The lack of investment in the south resulted as well in what international humanitarian organizations call a "lost generation" who lack educational opportunities and access to basic health care services, and who have little prospect for productive employment in the small and weak economies of the south or the north. Following an internal outcry, the Sadiq al-Mahdi government in March 1989 agreed with the UN and donor nations (including the U.S.) on a plan called Operation Lifeline Sudan (OLS), under which some 100,000 metric tons of food was moved into both government and SPLA-held areas of the Sudan, and widespread starvation was averted. Phase II of OLS to cover 1990 was approved by both the government and the SPLA in March 1990. In 1991, Sudan faced a 2-year drought and food shortage across the entire country. The U.S., UN, and other donors attempted to mount a coordinated international relief effort in both north and south Sudan to prevent a catastrophe. However, due to Sudan's human rights abuses and its pro-Iraqi stance during the Gulf War, many donors cut much of their aid to the Sudan. In a similar drought in 2000-01, the U.S. and the international community again responded to avert mass starvation in the Sudan. The U.S. and other donors continue to provide large amounts of humanitarian aid to all parts of the Sudan.

GOVERNMENT AND POLITICAL CONDITIONSSudan has an authoritarian government in which all effective political power is in the hands of President Omar Hassan al-Bashir. Bashir and his party have controlled the government since he led the military coup on June 30, 1989.

From 1983 to 1997, the Sudan was divided into five regions in the north and three in the south, each headed by a military governor. After the April 6, 1985 military coup, regional assemblies were suspended. The RCC was abolished in 1996, and the ruling National Islamic Front changed its name to the National Congress Party. After 1997, the structure of regional administration was replaced by the creation of 26 states. The executives, cabinets, and senior-level state officials are appointed by the president, and their limited budgets are determined by and dispensed from Khartoum. The states, as a result, remain economically dependent upon the central government. Khartoum state, comprising the capital and outlying districts, is administered by a governor.

In December 1999, a power struggle climaxed between President al-Bashir and then-speaker of parliament Hassan al-Turabi, who was the NIF founder and an Islamist ideologue. Al-Turabi was stripped of his posts in the ruling party and the government, parliament was disbanded, the constitution was suspended, and a state of national emergency was declared by presidential decree. Parliament resumed in February 2001 after the December 2000 presidential and parliamentary elections, but the national emergency laws remain in effect. Al-Turabi was arrested in February 2001, and charged with being a threat to national security and the constitutional order for signing a memorandum of understanding with the SPLA. He was placed in a maximum security prison. Al-Turabi was released in 2003, then detained again in 2004; he remains in custody.

The Comprehensive Peace Agreement signed January 9, 2005, provides for a new constitution, and new arrangements for power sharing, wealth sharing, and security applicable throughout the country. New institutions will be created and a new government of national unity installed once the constitution is ratified during the six-month pre-interim period. Once ratified, SPLM Chairman John Garang will become the First Vice President of Sudan and the new Government of Southern Sudan will be established.

ECONOMYIn 2003, the Sudan's mostly agricultural economy continued to be crippled by the civil war, destruction of infrastructure, economic mismanagement, and the existence of more than 4 million internally displaced persons and refugees. The country continued taking some steps toward transitioning from a socialist to a market-based economy; however, the government and governing party supporters remained heavily involved in the economy.

Sudan's primary resources are agricultural, but oil production and export are taking on greater importance since October 2000. Although the country is trying to diversify its cash crops, cotton and gum arabic remain its major agricultural exports. Grain sorghum (dura) is the principal food crop, and wheat is grown for domestic consumption. Sesame seeds and peanuts are cultivated for domestic consumption and increasingly for export. Livestock production has vast potential, and many animals, particularly camels and sheep, are exported to Egypt, Saudi Arabia, and other Arab countries. However, Sudan remains a net importer of food. Problems of irrigation and transportation remain the greatest constraints to a more dynamic agricultural economy.

The country's transportation facilities consist of one 4,800-kilometer (2, 748-mi.), single-track railroad with a feeder line, supplemented by limited river steamers, Sudan airways, and about 1,900 km. (1,200 mi.) of paved and gravel road--primarily in greater Khartoum, Port Sudan, and the north. Some north-south roads that serve the oil fields of central/south Sudan have been built; and a 1,400 km. (840 mi.) oil pipeline goes from the oil fields via the Nuba Mountains and Khartoum to the oil export terminal in Port Sudan on the red Sea.

Sudan's limited industrial development consists of agricultural processing and various light industries located in Khartoum North. In recent years, the GIAD industrial complex introduced the assembly of small autos and trucks, and some heavy military equipment such as armored personnel carriers and the proposed "Bashir" main battle tank. Although Sudan is reputed to have great mineral resources, exploration has been quite limited, and the country's real potential is unknown. Small quantities of asbestos, chromium, and mica are exploited commercially.

Extensive petroleum exploration began in the mid-1970s and might produce all of Sudan's needs. Significant finds were made in the Upper Nile region and commercial quantities of oil began to be exported in October 2000, reducing Sudan's outflow of foreign exchange for imported petroleum products. There are indications of significant potential reserves of oil and natural gas in southern Sudan, the Kordofan region and the Red Sea province.

Sudan is seeking to expand its installed capacity of electrical generation of around 300 megawatts--of which 180 mw is hydroelectric and the rest, thermal. Considering the continuing U.S. economic, trade, and financial sanctions regime, European investors are the most likely providers of technology for this purpose. More than 70% of Sudan's hydropower comes from the Roseires Dam on the Blue Nile grid. Various projects are proposed to expand hydropower, thermal generation, and other sources of energy, but so far the government has had difficulty arranging sufficient financing.

The Merowe dam project has received a boost from various Arab funds. The Arab Fund for Economic and Social Development donated $150 million, the Abu Dhabi Development Fund $100 million, the Kuwaiti Development Fund $150 million, and the Saudi Fund $150 million. The Sultanate of Oman may finance the dam power plant with $106 million. The Merowe dam, if built, would have a capacity of 1,250 mw. It would be built at the Nile's fourth cataract. Egypt has not voiced major objections on the issue of Nile water diversion, which Sudan's hydroelectric project would entail. The estimated total cost of the dam is $1.8 billion.

Historically, the U.S., the Netherlands, Italy, Germany, Saudi Arabia, Kuwait, and other Organization of Petroleum Exporting Countries (OPEC) have supplied most of Sudan's economic assistance. Sudan's role as an economic link between Arab and African countries is reflected by the presence in Khartoum of the Arab Bank for African development. The World Bank had been the largest source of development loans.

Sudan will require extraordinary levels of program assistance and debt relief to manage a foreign debt exceeding $21 billion, more than the country's entire annual gross domestic product (GDP). During the late 1970s and 1980s, the International Monetary Fund (IMF), World Bank, and key donors worked closely to promote reforms to counter the effect of inefficient economic policies and practices. By 1984, a combination of factors--including drought, inflation, and confused application of Islamic law--reduced donor disbursements, and capital flight led to a serious foreign-exchange crisis and increased shortages of imported inputs and commodities. More significantly, the 1989 revolution caused many donors in Europe, the U.S., and Canada to suspend official development assistance, but not humanitarian aid.

However, as Sudan became the world's largest debtor to the World Bank and International Monetary Fund by 1993, its relationship with the international financial institutions soured in the mid-1990s and has yet to be fully rehabilitated. The government fell out of compliance with an IMF standby program and accumulated substantial arrearages on repurchase obligations. A 4-year economic reform plan was announced in 1988 but was not pursued. An economic reform plan was announced in 1989 and implementation began on a 3-year economic restructuring program designed to reduce the public sector deficit, end subsidies, privatize state enterprises, and encourage new foreign and domestic investment. In 1993, the IMF suspended Sudan's voting rights and the World Bank suspended Sudan's right to make withdrawals under effective and fully disbursed loans and credits. Lome Funds and European Union (EU) agricultural credits, totaling more than 1 billion euros, also were suspended.

Sudan produces about 312,000 barrels per day (b/d) of oil, which brought in about $1.9 billion in 2003 and provides 70% of the country's total export earnings. These earnings could rise to an estimated $2 billion by the end of 2004. The oil production is expected to reach 500,000 barrels by 2005. However, without a swift resolution of its 20-year civil war, the country and its people will continue to reap little benefit from its natural resources, its infrastructure will continue to deteriorate, oil production and exports will at best remain stagnant in the next few years, and Sudan will never be able to attain its export and development potential.

In 2000-01 Sudan's current account entered surplus for the first time since independence. In 1993, currency controls were imposed, making it illegal to possess foreign exchange without approval. In 1999, liberalization of foreign exchange markets ameliorated this constraint somewhat. Exports other than oil are largely stagnant. However, the small industrial sector remains in the doldrums, spending for the war continues to preempt other social investments, and Sudan's inadequate and declining infrastructure inhibits economic growth.

DEFENSEThe Sudan People's Armed Forces is a 100,000-member army supported by a small air force and navy. Irregular tribal and former rebel militias and Popular Defense Forces supplement the army's strength in the field. This is a mixed force, having the additional duty of maintaining internal security. Some rebels currently fighting in the south are former army members. During the 1990s, periodic purges of the professional officer corps by the ruling Islamist regime eroded command authority as well as war-fighting capabilities. Indeed, the Sudanese Government admitted it was incapable of carrying out its war aims against the SPLA and NDA without employing former rebel and Arab militias to fight in support of regular troops.

Sudan's military forces have historically been hampered by limited and outdated equipment. In the 1980s, the U.S. worked with the Sudanese Government to upgrade equipment with special emphasis on airlift capacity and logistics. All U.S. military assistance was terminated following the military coup of 1989. Oil revenues have allowed the government to purchase modern weapons systems, including Hind helicopter gun ships, Anatov medium bombers, MiG 23 fighter aircraft, mobile artillery pieces, and light assault weapons. Sudan now receives most of its military equipment from Iraq, China, Russia, and Libya.

FOREIGN RELATIONSSolidarity with other Arab countries has been a feature of Sudan's foreign policy. When the Arab-Israeli war began in June 1967, Sudan declared war on Israel. However, in the early 1970s, Sudan gradually shifted its stance and was supportive of the Camp David Accords.

Relations between Sudan and Libya deteriorated in the early 1970s and reached a low in October 1981, when Libya began a policy of crossborder raids into western Sudan. After the 1985 coup in Sudan, the military government resumed diplomatic relations with Libya, as part of a policy of improving relations with neighboring and Arab states. In early 1990, Libya and the Sudan announced that they would seek "unity." This unity was never implemented.

During the 1990s, Sudan sought to steer a nonaligned course, courting Western aid and seeking rapprochement with Arab states, while maintaining cooperative ties with Libya, Syria, North Korea, Iran, and Iraq. Sudan's support for regional insurgencies such as Egyptian Islamic Jihad, Eritrian Islamic Jihad, Ethiopian Islamic Jihad, Palestinian Islamic Jihad, Hamas, Hizbullah, and the Lord's Resistance Army generated great concern about their contribution to regional instability. Allegations of the government's complicity in the assassination attempt against the Egyptian President in Ethiopia in 1995 led to UN Security Council sanctions against the Sudan. By the late 1990s, Sudan experienced strained or broken diplomatic relations with most of its nine neighboring countries. However, since 2000, Sudan has actively sought regional rapprochement that has rehabilitated most of these regional relations.

Sudan broke diplomatic relations with the U.S. in June 1967, following the outbreak of the Arab-Israeli War. Relations improved after July 1971, when the Sudanese Communist Party attempted to overthrow President Nimeiri, and Nimeiri suspected Soviet involvement. U.S. assistance for resettlement of refugees following the 1972 peace settlement with the south added further impetus to the improvement of relations.

On March 1, 1973, Palestinian terrorists of the "Black September" organization murdered U.S. Ambassador Cleo A. Noel and Deputy Chief of Mission Curtis G. Moore. Sudanese officials arrested the terrorists and tried them on murder charges. In June 1974, however, they were released to the custody of the Egyptian Government. The U.S. Ambassador to the Sudan was withdrawn in protest. Although the U.S. Ambassador returned to Khartoum in November, relations with the Sudan remained static until early 1976, when President Nimeiri mediated the release of 10 American hostages being held by Eritrean insurgents in rebel strongholds in northern Ethiopia. In 1976, the U.S. decided to resume economic assistance to the Sudan.

In late 1985, there was a reduction in staff at the American Embassy in Khartoum because of the presence in Khartoum of a large contingent of Libyan terrorists. In April 1986, relations with Sudan deteriorated when the U.S. bombed Tripoli, Libya. A U.S. Embassy employee was shot on April 16, 1986. Immediately following this incident, all nonessential personnel and all dependents left for 6 months. Sudan in this period was the single largest recipient of U.S. development and military assistance in Sub-Saharan Africa. The U.S. has worked closely with Sudanese governments since 1986 to see that emergency relief assistance is provided to those displaced by the civil war. However, official U.S. development assistance was suspended in 1989 in the wake of the military coup against the elected government.

Sudan's position during the Iraq/Kuwait crisis in the early 1990s strained relations with the U.S. Sudan stated that Iraq should not have invaded Kuwait, but it was equally critical of the presence of Western forces on Islamic holy lands.

In the early and mid-1990s, Carlos the Jackal, Osama bin Laden, Abu Nidal, and other terrorist leaders resided in Khartoum. Sudan's role in the radical Pan-Arab Islamic Conference represented a matter of great concern to the security of American officials and dependents in Khartoum, resulting in a number of draw-downs and/or evacuations of U.S. personnel from Khartoum in the early-mid 1990s. Sudan's Islamist links with international terrorist organizations represented a special matter of concern for the U.S. Government, leading to Sudan's 1993 designation as a state sponsor of terrorism and a 1996 suspension of U.S. Embassy operations in Khartoum and a radical reduction in American Embassy and USAID staff. The U.S. added Sudan to its terrorism list in 1993 because Sudan was a safe haven for Islamic terrorist groups and because Sudan supported insurrections and/or radicals in Algeria, Egypt, Eritrea, Ethiopia, Tunisia, and Uganda. After Sudan was designated a state sponsor of terrorism, relations plummeted and have only made a modest recovery to date.

In October 1997, the U.S. imposed comprehensive economic, trade, and financial sanctions against the Sudan. In August 1998, in the wake of the East Africa embassy bombings, the U.S. launched retaliatory cruise missile strikes against Khartoum. The last U.S. Ambassador to the Sudan, Ambassador Tim Carney, departed post prior to this event and no new ambassador has been designated since. The U.S. Embassy is headed by a charge d'affaires.

The U.S. and Sudan entered into a bilateral dialogue on counter-terrorism in May 2000, and Sudan has provided concrete cooperation against international terrorism since the September 11, 2001 terrorism strikes on New York and Washington. However, though Sudan publicly supported the international coalition actions against the al Qa'ida network and the Taliban in Afghanistan, the government criticized the U.S. strikes in that country and opposed a widening of the effort against international terrorism to other countries. Sudan remains on the state sponsors of terrorism list.